Mortgage rates have been in a narrow range for nearly two months, even as the economy has shown improvement. With the Federal Reserve beginning to wean the markets from its repurchases of Treasury debt, there will be less to restrain mortgage rates if the economic data continues to improve. Should the economic recovery stumble, as it most likely will at some point, mortgage rates will pull back. Historically, bond yields and mortgage rates have shown very little movement over long periods of time that are punctuated by sharp movement in a very short period of time. Mortgage rates are closely related to yields on long-term government bonds. The pattern is likely to play out once again, but it remains unclear whether the next big move is up or down.
Mortgage rates remain much lower than one year ago. This time last year, the average 30-year fixed mortgage rate was 6.74 percent, meaning a $200,000 loan would have carried a monthly payment of $1,295.87. With the average rate now 5.67 percent, the monthly payment for the same size loan would be $1,157.00, a savings of $139 per month for a homeowner refinancing now.
SURVEY RESULTS
30-year fixed: 5.67% - up from 5.65% last week (avg. points: 0.36)
15-year fixed: 4.93% - down from 4.97% last week (avg. points: 0.39)
5/1 ARM: 4.93% - down from 5.03% last week (avg. points: 0.43)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
